Holiday Shopping Layaway Plans: Are They Worth It?

The holiday season should be all about festivities, revelries and spending quality time with loved ones, family and friends. Unfortunately, all it ends up becoming is time where you have to think about your budgets and dig deep into your pockets for holiday gifts. By now, we’ve all realized that Santa Claus doesn’t come bearing gifts; you have to go out and buy them. And often they end up burning a hole in your pocket and leave you with never ending credit card bills. Hence, Holiday Shopping Layaway Plans seem like a reasonable option to many.

You just cannot do without holiday gifts for your loved ones. But in today’s times, when many of us have had to make serious cuts in our monthly budgets to cope with the effects of economic slowdown, can we really spare cash for buying gifts? That’s why retailers offer Holiday Shopping Layaway Plans as they are supposed to ease the burden on our pockets. Quite simply, if you buy gifts using these plans, you ask the store to keep your chosen items aside and pay the amount due to them over a certain period of time. But is it always the smart option for you? You need to know more about how these plans work, their advantages and disadvantages to be able to make that decision for yourself.

Holiday Shopping Layaway Plans: How do they work?

For starters, you go to a store that offers these plans for the holiday season. And there’s every chance that your favourite retailer, departmental store will have some kind of arrangement in the form of layaway plans. You choose the gift you want to buy and then sign a layaway contract with the store. Based on the contract you will have to pay the due amount to the retailer over a certain period of time, which could extend right up to Christmas.

The contract you sign will also mention the fees you have to pay the retailer for your purchase. It often includes service charges and cancellation fees, if you want to get out of the contract for some reason. Once you have paid off the amount, you will be able to collect your chosen product from the store. Thus you won’t have to worry about paying the entire amount for the item upfront and will be able to reserve the gift of your choice for Christmas.

Most major retailers have their own Holiday Shopping Layaway Plans and they might vary significantly from each other. Some of them will be applicable for gifts that are over a certain price range and will let you make payments in a stipulated number of instalments. They will all have their own set of rules including amount that has to be paid up front, cancellation fees etc and you should through the fine print carefully so that you make a purchase decision.

Holiday Shopping Layaway Plans and their advantages

• Holiday season is meant to spread the cheer but in many cases it only ends up spreading gloom, especially in the month of January when you have to pay off your credit card. If you are not careful and don’t keep an eye on your spending, you could end up incurring huge expenses buying gifts for your friends and family. Layaway plans ensure that you pay for your chosen products before Christmas; hence you don’t have to worry about paying your bills later.
• It also means you will definitely have a gift for your dear ones and won’t have to feel bad about not being able to afford one.
• You will be able to reserve things that are on your list and not have to worry about them going out of stock or their prices shooting up around Christmas.

While these might be some of the advantages of layaway plans there is a lot you stand to lose as well, which is why you need to be careful before getting into any contract with retailers.

Holiday Shopping Layaway Plans: The Disadvantages

• It may be true that you are able to get the present of choice for your loved ones; it’s equally true that you might end up paying through your nose for it. That’s because the fees charged by retailers are quite high and the total amount you end up paying for the same item will be a lot more than its original price.
• Interest rates are usually higher on shorter layaway periods; hence it’s a big mistake to think you don’t pay huge amounts by paying off the store within a short period of time.
• Holiday Shopping Layaway Plans can be quite addictive and it’s something you need to be wary of.
• If you want to get out of your contract for some reason, you will end up paying cancellation fees, which are substantial and lose money in the process.
• By reserving an item in advance you are agreeing to the price offered by the store at that point in time. It means you could miss out on sale prices that might be available at a later date.
Hence it’s important that you weigh your options before getting tied up into any layaway contract with retailers. Here are a few things you will need to look at before taking this crucial decision:
• The fees charged by a retailer in the form of service charge have to be considered.
• Cancellation fees need to be looked into before committing into any kind of contract.
• The price of item you choose to buy should be taken into account as well. If you think its price is likely to be reduced substantially, you are better off waiting for it to happen.
• Check if the item you have asked the store to layaway is actually available and in stock with them.
• Some stores offer refunds at sale prices rather than the layaway price, which means you lose money. Find out about the refunds policy before signing a contract with a store.

Even the biggest supporters of these plans might ask you to use caution and discretion before choosing Holiday Shopping Layaway Plans because credit cards that charge a lower interest rate might still work as the most reasonable option for purchase of holiday gifts.